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Avoiding Probate with a Trust

Privacy is just one of the benefits of having a trust created as part of an estate plan. That’s because assets that are placed in a trust are no longer in the person’s name, and as a result do not need to go through probate when the person dies. An article from The Daily Sentinel asks, “When is a trust worth the cost and effort?” The article explains why a trust can be so advantageous, even when the assets are not necessarily large.

Let’s say a person owns a piece of property. They can put the property in a trust, by signing a deed that will transfer the title to the trust. That property is now owned by the trust and can only be transferred when the trustee signs a deed. Because the trust is the owner of the property, there’s no need to involve probate or the court when the original owner dies.

Establishing a trust is even more useful for those who own property in more than one state. If you own property in a state, the property must go through probate to be distributed from your estate to another person’s ownership. Therefore, if you own property in three states, your executor will need to manage three probate processes.

Privacy is often a problem when estates pass from one generation to the next. In most states, heirs and family members must be notified that you have died and that your estate is being probated. The probate process often requires the executor, or personal representative, to create a list of assets that are shared with certain family members. When the will is probated, that information is available to the public through the courts.

Family members who were not included in the will but were close enough kin to be notified of your death and your assets, may not respond well to being left out. This can create problems for the executor and heirs.

Having greater control over how and when assets are distributed is another benefit of using a trust rather than a will. Not all young adults are prepared or capable of managing large inheritances. With a trust, the inheritance can be distributed in portions: a third at age 28, a third at age 38, and a fourth at age 45, for instance. This kind of control is not always necessary, but when it is, a trust can provide the comfort of knowing that your children are less likely to be irresponsible about an inheritance.

There are other circumstances when a trust is necessary. If the family includes a member who has special needs and is receiving government benefits, an inheritance could make them ineligible for those benefits. In this circumstance, a special needs trust is created to serve their needs.

Another type of trust growing in popularity is the pet trust. Check with a local estate planning lawyer to learn if your state allows this type of trust. A pet trust allows you to set aside a certain amount of money that is only to be used for your pet’s care, by a person you name to be their caretaker. In many instances, any money left in the trust after the pet passes can be donated to a charitable organization, usually one that cares for animals.

Finally, trusts can be drafted that are permanent, or “irrevocable,” or that can be changed by the person who wants to create it, a “revocable” trust. Once an irrevocable trust is created, it cannot be changed. Trusts should be created with the help of an experienced trusts and estate planning attorney, who will know how to create the trust and what type of trust will best suit your needs.

Reference: The Daily Sentinel (Jan. 23, 2020) “When is a trust worth the cost and effort?”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

Include Fido or Fluffy in Estate Planning

If you are a pet owner, you no doubt make plans for your pet when you go on vacation. If you are a very dedicated pet owner, perhaps you have already made provisions in your will or created a pet trust. If your pet outlives you, then such a trust can provide for your pet. However, what about if you become mentally or physically incapacitated, asks Next Avenue’s article “How to Make Plans to Provide Care for Your Pet If You Can’t.”

What would happen if you had Alzheimer’s and there was no plan for you or your pet? A legal process could be initiated by a family member to establish a court-supervised guardianship or conservatorship and a judge would decide who would be responsible for you and your legal and financial affairs. This person would also be responsible for decisions about your pet, since pets are treated as property by the law.

The guardian might understand how important your pet is to you, but they just as easily might not. If they decide that your beloved pet is a burden, or they don’t want to spend money on your pet’s care, they have the legal power to send the pet to a shelter or give the pet away. Writing a will with a provision or two about your pet’s care won’t help, because the will does not take effect until you die.

One option is to have an estate planning attorney prepare a durable power of attorney document, with a person named to act as your agent. This person would be legally empowered to make decisions about your finances and property, including your pet(s), without intervention by the court. However, that won’t solve the problem either.

The power of attorney document won’t include details on how you want your pet to be cared for. Those details will be entirely up to the person who serves as your power of attorney.

A revocable trust is an alternative. The document can be used to explain, in detail, exactly what your wishes are for your pet (as well as any other property placed in the trust). The person designated as your trustee now has a legal obligation to carry out your wishes. You can say what you want to happen to your pet if you become incapacitated, and how much money from the trust is to be spent on pet care, food, veterinarian care, grooming, toys, etc.

Your revocable trust document can also designate a caretaker for your pet or state that the pet should go to a no-kill pet shelter. You can, if you wish, use the trust document to ensure that the caretaker is paid for taking on the responsibility of caring for the pet and reimbursed for any pet expenses.

You can also direct that your pet be brought to you for regular visits, if you need to live in an assisted living facility or a nursing home. You can also instruct that you want to be placed in a facility that has a robust pet therapy program or a “house pet” that lives at the facility.

Another option is to create a standalone pet trust. This trust is solely focused on your pet and its care. All funds in the trust are designated to pay for the pet’s care and services of a caretaker. The trustee could be the caretaker or someone else. This could give you even more control over what happens to your pet.

Speak with an estate planning attorney who has helped pet owners set up plans for their pets. It’s recommended that this be taken care of as soon as possible. We never know when an illness may strike, or an accident occur.

Reference: Next Avenue (Jan. 10, 2020) “How to Make Plans to Provide Care for Your Pet If You Can’t”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

Karl Lagerfeld’s Beloved Choupette Maintains Her Lavish Lifestyle

The world of fashion mourned when Karl Lagerfeld died, leaving a legacy of design and a unique style. He is survived by his cat, Choupette. The cat’s nine lives will continue to be lavish, as he undoubtedly made sure that she will be well-cared for.

Forbes’ recent article, “Why One Of Karl Lagerfeld's Legacies Might Be Estate Planning For Your Pet.” reports that as an arbiter of style, Karl Lagerfeld was always clear and concise in his wishes. That can be seen in how he often spoke about his death. In April 2018, in an interview with Numero he stated, “There will be no burial. I'd rather die ... I've asked to be cremated and for my ashes to dispersed with those of my mother… and those of Choupette, if she dies before me.”

After Lagerfeld’s death, Choupette continues to be a star. She has become an icon in her own right, because of the love lavished upon her by her owner. With an Instagram following, a coffee table book and a modelling career, this cat will likely continue her pampered existence. However, the designer’s death raises a key concern in estate planning today: the care of a pet when someone dies.

Like Lagerfeld, many people see their dogs, cats, and other animal friends as members of the family. Therefore, it’s only natural that they be part of the estate plan. Since Choupette lived a lavish lifestyle while Lagerfeld was alive, it’s presumed that he likely made the necessary arrangements for his kitty in his estate planning.

A pet trust is pretty straightforward: in your estate plan, you can create a trust that coordinates the care and maintenance of your pet. Like all trusts, there will be a trustee who manages the funds and a caretaker who takes care of the pet. The custodian can request money and the trust specifies the client’s hope that those funds be used by the custodian for the benefit of the pet.

A complicated facet of a pet trust is to consider the care and maintenance of the pet. In Choupette’s case, she lived a life of extravagance, so Lagerfeld probably funded the trust at a level to make sure this lifestyle can continue.

However, for most, there needs to be some formula to fund the trust. This amount often is based on the type of animal and its past and future projected needs. Some pet owners consult with their veterinarian to determine an appropriate amount for the future care needs for their dog, cat, or other pet.

When the pet dies, the trust ends, and the caregiver can be the beneficiary of the remaining funds for taking care of the pet so well.

One extra thought for planning for pet care: most animals are very social, and if there are family members or friends who they saw on a regular basis, their quality of life will be enhanced if they can continue to visit with these people, after their owners have died. Pets will know that someone they love is missing, but they will find comfort in spending time with people they know.

Reference: Forbes (February 20, 2019) “Why One Of Karl Lagerfeld's Legacies Might Be Estate Planning For Your Pet”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

How to Care For Your Pets After You’re Gone

It’s interesting that so many Americans still don’t have wills, yet a recent survey of pet owners showed that almost half of them have taken steps to take care of their animal companions, if they should die first. Maybe pet owners know something that people without pets don’t?

However, you feel about pets and wills, there are many ways to ensure that Bella, Luna, Sadie or Bailey will enjoy their lives in good care, after their humans are gone. Those include traditional financial planning instruments, like pet trusts, living trusts, annuities and even life insurance.

Forbes’s article, “3 Financial Planning Tips For Pets Owners,” says that typically, “pet estate plans” should cover more than simply who will care for the pet, when you are no longer around. Expenses such as food, doggie day care, grooming, veterinarian bills and medication should also be considered.

20% of all respondents in the survey said they have financially planned for their pets' future care. About 38% said they added the pet's future caregiver as a beneficiary to a life insurance policy and 35% added more coverage to their life policies. 13% also recently purchased annuities naming the pet's caregiver as the beneficiary.

However, many pet owners forget about end-of-life planning. Consider an individual trust for your pet or donating funds to your local humane society or pet shelter.

One question many have before adding a new animal to the family, is whether they can afford it. The cost of an animal from a breeder can be high, so a more affordable option is to check out your local humane society or animal rescue group. Remember that the costs of food, vet bills and other supplies are just as important to think about, before making a pet a part of your family. Pets are too often returned to animal shelters, because pet parents were unable to afford to properly care for the pet.

Last, ask about pet insurance at your veterinarian. Many clinics offer plans and staff members will be able to talk to you about the right option based on the type of animal, breed, age and other criteria of your pet.

Pet owners usually think of their pets as members of the family, and planning for their “furry kids” is as important as planning for their children and grandchildren.

Reference: Forbes (January 27, 2019) “3 Financial Planning Tips For Pets Owners”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

Two Bronx Felines Continue to Enjoy the Good Life, Thanks to Their Owner’s Estate Plan

Here’s a different kind of Bronx tale, or perhaps Bronx tail would be more accurate: a Bronx widow left $300,000 in her will to her cats, with instructions that the funds be used for the care of Troy and Tiger. That’s a lot of kibble, says Wealth Advisor, which published “New York Widow Leaves $300G To Her Cats.”

Tiger struck it especially rich. This former alley cat is now living the high life in sunny Florida, dining on filet mignon-flavored Fancy Feast and napping in a plush faux-fur bed with silk lining.

“He deserves it,” said Dahlia Grizzle, the former home health aide to the late Ellen Frey-Wouters and now Tiger’s caretaker. “He’s a wonderful cat.”

Frey-Wouters was a native of the Netherlands, who worked for the United Nations. She died in 2015 at age 88. Her husband was a Brooklyn College professor who died in 1989. They had just one child who died in infancy.

“The cats were like her babies,” Grizzle said.

Her attorney was surprised when Frey-Wouters suggested that she leave the large sum to her cats.

The attorney said he didn’t think that $300,000 was necessary. He pointed out the case of Leona Helmsley, who left $65,000 to a dog and became a subject of some amusement. In fact, Helmsley left $12 million to her Maltese, Trouble.

Frey-Wouters insisted that her cats be taken care of.

Let’s be clear –a pet owner cannot legally leave any part of an estate outright to an animal. However, funds can be left to a person who is designated to care for the pet, with instructions that the money be used for the pet’s care. Pet trusts are also used to provide care for a pet after its owner passes away. If you have animal companions that may outlive you, speak with an experienced estate planning attorney to find out how you can protect your pets after you pass. Today, this is a very common wish by pet owners and one that can be addressed in the estate planning process.

Reference: WealthAdvisors (September 7, 2017) “New York Widow Leaves $300G To Her Cats”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899 .

Does Your Estate Plan Include Care for Your Pet?

If your idea of planning for your animal companion’s well-being after you pass is asking a family member if they will take Spot and Flurry, think again.

As MarketWatch reports, “How to provide for your pet in your estate plan,” many people do just that: ask a relative and hope for the best. But others set up a formal estate plan for pets to ensure that they get continuing quality care, if their owner dies before they do. Most importantly, a pet estate plan could keep them from the shelter, which happens to many pets after their owners die.  These items should be considered when pondering the best future for your pets.

1. Designate a caregiver. When considering a caregiver for your pets, evaluate whether that person is willing, capable and responsible enough to have the pet long-term. In addition, to be safe, name a contingent caregiver.
2. Earmark funds. Pet owners should list all their pet-care costs, and consider the pet’s expected lifespan. One pet owner added up the annual expenses for veterinary care for her two dogs, as well as their medications, monthly grooming, food, toys and a contingency for unanticipated expenses. She multiplied the annual total by what she thought to be the average life expectancy for the dogs and arrived at a budget of $25,000 for lifetime care. Determine how the funds should be set aside. You could create a trust, a bank account controlled by an executor (or by the guardian) or life insurance. Note that the beneficiary of a life-insurance policy can’t be a pet, but it can be a trust that includes provisions for a pet’s care or a trust specifically created for the benefit of the pet.
3. Draft a care plan. Set out clear, detailed instructions on how to care for your pet. That will make it easier for future caregivers to comply with your wishes. Your list may include the food your pet eats, how often he’s fed and his veterinarian.
4. Formalize your agreement. After you have made the basic decisions about your pet’s care, legally document them to help ensure that your wishes are executed. In fact, you can create a pet trust. This legal arrangement is available in all 50 states, but the specifics can vary. A pet trust can stipulate very specific directions for the care and funding of such care for your pet, after you pass away. Talk to an experienced estate planning attorney about creating this arrangement. You can also provide for your pets in your will. If you go this route, make sure that someone can step in immediately to care for your pet, because executing a will takes time. After the administration of an estate is completed, the will’s executor doesn’t have any continuing obligation to ensure the pet’s well-being.

To be certain that your beloved animal companions will have a comfortable and secure life if you die before they do, create a formal, legal plan and fund it. Even if you create a plan, if you neglect to fund it, your beloved pet may not enjoy the kind of life without you that you imagine.

Reference: MarketWatch (November 30, 2017) “How to provide for your pet in your estate plan”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899 .

Don’t Leave These Out of Your Will!

When most people think of creating a will, they think about naming an executor, distributing their financial assets and considering whether or not they need to include any tax planning in their estate plan. But there are a few other things you’ll want to be sure to include, according to an article from Philly.com, “5 Things People Forget to Include in Their Will.”

1. Alternate Beneficiaries. A big item in your estate planning should be to include at least one alternative beneficiary, in case the named beneficiary dies before you or isn’t able to claim under the will. Provide an alternative beneficiary to be sure that the property goes where you want it to go.
2. Personal Property and Family Heirlooms. Some heirlooms can have a great deal of sentimental value, such as holiday ornaments and handmade linens. You should clearly state which family members get which item. You can add a list in your will. However, this can make it hard to add or delete items. A personal property memorandum is a separate document that lists which friends and family members get what personal property. Some states have laws that say if it’s referenced in the will, it’s legally binding. Even if the personal property memorandum isn’t legally binding, it’s helpful for your heirs to avoid confusion and fighting.
3. Digital Assets. What becomes of our digital assets and accounts when we pass away? Take these steps to help your family deal with your digital property:
4. Put together a list of all your online accounts, like e-mail, financial accounts, Facebook, and anywhere online where you conduct business;
5. List your username and password for each account;
6. Include access information for your digital devices (such as smart phones and computers); and
7. Be sure that the agent under your durable power of attorney and the personal representative named in your will, have authority to handle your online accounts.
8. Beloved Companion Pets. Far too many family pets end up in shelters when their owners die and family members can’t or won’t take them into their homes. In certain states, you can now create a pet trust to leave assets to pay for the care of your pet, and you can name a caretaker in your will. Make sure the person agrees to do this, and name an alternative if, for some reason, that person cannot fulfill their duties. Talk with an estate planning attorney who will be able to help you provide for your furry friends.

Reference: Philly.com (September 2, 2015) “5 Things People Forget to Include in Their Will”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899 .

How a Pet Trust Can Care for Your Beloved Furry Kids

If your household includes pets, whether they have fur, feathers or fins, you can use a pet trust to protect pets when you have passed away or when you are no longer able to take care of your pets or yourself. A pet trust provides specific instructions to caretakers and also provides funding.

AZ Central’s article, “Who will care for your beloved pet after you're gone? A trust can help with that,” says that it's hard to guess the number of people who have trusts to benefit pets. It’s still a relatively new concept. However, more people are learning that you can and should include pets in estate planning. Many pet lovers find that a trust is appealing and worth the cost.

A trust lets assets be transferred to others without going through probate. They also can provide ongoing financial support for beneficiaries who might burn though a lump sum. A revocable living trust can be changed, dissolved or redrafted, while you're still living and competent.

These are packaged frequently with documents like a pour-over will (for assets not titled into the trust) and financial and health-care powers of attorney, which appoints another person to act on your behalf in case of incapacity.

A pet trust designates a trusted person or organization to provide ongoing care for your animals and gives them the money to do so. Many people make informal arrangements. They ask friends or relatives to take in their animals, but without a trust or other legal document, there's no guarantee that your instructions will be followed.

As part of the process, an owner can detail how much medical care should be given to a pet, especially an older one (when euthanasia might be the preferred route). Trusts can help you prepare for those and other contingencies, so you’d have some control over what happens to your pet.

Designating the right trustee is critical. That is the person or organization entrusted with carrying out your wishes.

If you decide not to create a pet trust and just hope that writing down some instructions and coming to an agreement with a friend or relative will protect your pet, remember that this will not be legally binding. There would be nothing stopping your friend or family member from leaving your pet at a shelter and taking the money for their own use. With a trust, you gain peace of mind.

Reference: AZ Central (March 25, 2017) “Who will care for your beloved pet after you're gone? A trust can help with that”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899 .

Estate Planning Can Protect Beloved Pets Too

When pet owners die and no family members are able or willing to take in their pets, most dogs and cats end up in a shelter, unloved and unwanted. Since many of these animals are also older, they are less likely to find forever homes.

Reuters’ recent article, “Your Money: How to protect your prized pet with a trust,” acknowledges that wills and estate plans are hard enough for most of us to comprehend, let alone thinking of planning for our pets. A total of only 67% of Americans over 55 have a will, and provisions for pets have been thought of as a fancy of the ultra-rich. Some of the bad association stems from a high profile 2007 lawsuit over real estate tycoon Leona Helmsley's attempt to leave $12 million to her dog, which was later reduced to $2 million.

One way to solve this issue is to create a trust for your pets. Work in this area has evolved and there are now ways for pet owners to make legal arrangements so their animal companions don’t end up abandoned. When a pet owner is incapacitated or dies and there’s no plan for the pet, by law, they are deemed to be abandoned and are required to go to a city shelter. In other words, the pets are deemed to be property.

Only about 25% of people make a provision for their pets in their wills. It’s easy to add. In fact, it can be as simple as providing “I leave my dog to...” However, you can also do more and write in details, such as “My dog Fluffy only eats Alpo dog food, and please take him to his vet, Dr. Applewhite.”

Don’t forget to leave funds for the care of the pet. You should be able to figure out how much will be necessary by taking a look at the annual cost of care and feeding the pet, and then estimate how long you expect your animal companion to live. An estate planning attorney will be able to help you work through the details, and include care for your beloved furry friend in your estate plan.

Reference: Reuters (December 13, 2016) “Your Money: How to protect your prized pet with a trust”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899 .

Don’t Forget Your Pets When Planning for the Future

The stories are more common than anyone wants to consider. When seniors pass, their beloved pets often end up in shelters or are abandoned if no planning has taken place. Pet owners are given suggestions in this segment from 12 News Phoenix “What if your pet outlives you? Here are some options.”

Pet trusts and estate plans can be created to help your pets—along with some other legal options. To set aside some money, you can create a fund inside a trust and have that money managed for the pet guardian. If you can’t find someone to take responsibility for your pet, there are several options to prevent Fluffy from going to a public county facility or shelter.

For example, there is Gilbert's Furever Friends Rescue in Arizona that helps pets who outlive their owners. They help those in need pass along their pets before they’re unable to care for them. With all of the retirees in the Copper State, it’s common for people to move to the Southwest; however, their families haven’t all moved with them. As a result, there’s no one in the retirement community to help them out.

The rescue is totally nonprofit, and it aims to decrease the number of intakes and euthanasia cases in Maricopa and Pinal counties. Since it started four years ago, Gilbert's has managed to adopt out more than 1,500 dogs and cats and has helped more than 300 families.

Gilbert's doesn’t charge for animal surrender, but pets must be vetted, spayed and neutered, and have up-to-date vaccines.

Not every community is fortunate to have a rescue shelter like Gilbert’s. However, with good planning, you can make the necessary arrangements to ensure that your pets do not face an unhappy future without you. Speak with an estate planning attorney to learn about how pet trusts would work as part of your estate plan, and start the process. You’ll need to think about who would be best to provide your pet with a loving home. If no such person is available or willing to do this, identify a no-kill shelter where your pet might comfortably live out the rest of his or her life.

Reference: 12 News Phoenix (September 5, 2016) “What if your pet outlives you? Here are some options”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899 .